Electricity marketers accused of deceptive practices

Attorney General Kathleen Kane and state Consumer Advocate Tanya McCloskey are taking on electricity marketers they say deceived customers about their rates and stuck them with massive electricity bills over the winter.

Respond, IDT, Blue Pilot and Pennsylvania Gas & Electric currently market power to customers of Met-Ed and PPL Electric Utilities.

"The core function of the Consumer Protection Bureau is to advocate for consumers and investigate fraud on their behalf. We received thousands of complaints from consumers who could not pay their excessively high bills. Those consumers were deceived and we are taking those who participated in the deception to task," Kane said in a statement provided by her office.

"I think that's great," said Susan Martucci of Salisbury Township, who was a customer of Blue Pilot Energy until her kilowatt-per-hour price rose from 10.9 cents in January to 44.9 cents in February, killing her budget and prompting her to switch to a new supplier.

She supports the state's efforts to do what it can for customers like her.

"I'm glad that they did something," Martucci said. "I hope it pans out for the consumer."

Thousands of customers like Martucci who chose electricity suppliers offering variable rate contracts were hit with massive rate hikes in January and February when frigid temperatures brought on by the polar vortex caused rising demand and spiking natural gas prices.

Kane and McCloskey allege that the suppliers promised low or "competitive" rates to customers who switched to their companies and that the exorbitant prices consumers were charged did not reflect the actual cost of providing power.

The complaints' allegations include that company salespeople misrepresented themselves as representing customers' utility companies, promised rates would be at or below default "price to compare" electricity rates, switched customers without their consent, failed to provide accurate pricing information and did not respond to customer complaints.

Carl Savory of Milford Township said he signed up to buy his electricity from Hiko Energy when a sales representative told him his price always would be 10 percent less than what PPL charged. He said that didn't happen and he got bills in February and March at rates of 29.9 cents per kwh and 25.9 cents per kwh.

He's since returned to buying his power from PPL.

"I'm going to stay there ," Savory said Friday.

He said he was deceived and is all for the state trying to get money back for customers.

"I more than believe I'm owed that money," he said.

The Office of Attorney General received 42,603 telephone calls and 7,551 consumer complaints about electricity spikes in the first six months of the year. The Office of Consumer Advocate received another 3,000 calls.

"What we wanted to do is have some complaints that were targeted to some every specific conduct we were hearing about and able to confirm through this process," said McCloskey.

The Public Utility Commission has three of the four — HIKO, IDT and Respond — under investigation and is pursuing a 2012 unauthorized service switching case against a fourth, Pennsylvania Gas & Electric, said spokeswoman Robin Tilley. It received more than 7,000 informal or formal complaints about billing during the polar vortex.

The commission's investigators have negotiated settlements and refunds for customers of some companies, she said.

Earlier this year, the commission passed new regulations that require utility companies and suppliers to work together so customers can change suppliers within three business days to escape unfavorable terms before they get another bill.

HIKO faces a lawsuit filed over similar billing issues earlier this month by regulators in New Jersey.